Kamala Harris has a reputation as a tough negotiator, extracting the second-largest settlement in U.S. history from big banks, which paid $25 billion for their role in the foreclosure crisis.
But there’s more to that story.
Joe Biden’s just-announced running mate has touted for years that she forced the banks to cough up another $5 billion. “President Obama stood with me and 48 other attorneys general in taking on the banks and winning $25 billion for struggling homeowners,” Harris said in her 2012 Democratic National Convention speech.
But other attorneys general, notably Eric Schneiderman in New York, took that stand before Harris, who as California’s top lawyer hesitated until Schneiderman’s office marshaled housing activists and pressured her then-rival Gavin Newsome to oppose a more lenient agreement. Only after Newsome wrote a letter opposing a lesser settlement did Harris walk away from the talks, prompting the banks to offer more money.
Amy Schur, campaign director for Alliance of Californians for Community Empowerment, which pushed Harris to oppose the initial settlement, said Harris is “not very different from the majority of elected officials.”
“It was when we pushed her to meet with and hear directly from people losing their homes unfairly, and she heard from community groups and unions across the state — organized groups with some power — that we saw her moving to action,” Schur said.
Things actually could have been worse for mortgage lenders. More radical plans were on the table to hold them accountable for bad practices — including fraudulently foreclosing on properties and back-dating mortgages — that cost many Americans their homes.
Sheila Bair, as chair of the Federal Deposit Insurance Corporation, drafted a $24.4 billion proposal which the banking industry panned. It called for reducing mortgage payments to 31 percent of borrowers’ income, with the government covering half the losses if those borrowers defaulted. That plan was scrapped in favor of a settlement.
While the 2012 settlement carried a lofty price tag, it spared lenders from further liability. That helps explain the real estate and finance sectors’ comfort with Harris and why her earlier presidential campaign enjoyed steady support from banks, private equity firms, real estate developers and brokerages.
“People in the real estate business appreciate tough negotiators when they feel they’re on their side,” said Time Equities CEO Francis Greenburger, who has donated to Harris’ campaign. “And while as the vice president, presumably, she could be on the other side of an issue, she is seen more as a moderate than an extremist, and is closer to Biden than Bernie [Sanders] or Elizabeth Warren.”
Harris’ short-lived presidential campaign drew support not only from major banks but from some big names in real estate.
Blackstone chief operating officer Jonathan Gray and his wife Mindy each donated $2,800. Douglas Durst, who leads the Durst Organization, donated $1,000. Affordable housing developer Ron Moelis, head of L+M Development, also chipped in $1,000, a month before Harris suspended her campaign.
Beatrice Hsu, senior vice president of development at Brookfield Property Partners, donated $2,800. Related Companies’ top lobbyist, Charles O’Byrne, supported Harris’s Senate campaign, and staffers from the development firm have backed her over the years.
“If Joe [Biden] had asked me, which he didn’t, that’s who I would have recommended,” Durst said in a statement about Harris. “She is a great choice and I am a big supporter.”
Besides her reputation as a moderate, rather than a champion of populist ideologies that have unnerved real estate executives, Harris has a compelling narrative that sets the industry at ease, sources say.
One political operative called Harris “pragmatic and charismatic.” The coalition that is interested in removing President Donald Trump from power, which has grown to include many in the financial sector, does not find Harris “as frightening,” the person said.
“She is someone who is thoughtful, but incremental,” the politico said. “She’s always looking for the sweet spot to do what’s right and what’s achievable.”